"Where are they putting the additional unexpected $2M in sales? "
They're putting it in the same places as every other $5 in sales. They skim half off the top and the rest goes into the prize pools. The ads are only for estimated jackpots, and higher sales increase it. They're not going to change the advertised amount unless sales are substantially higher than expected, and if you got those numbers from the site that shall not be named (which you must have, because the Texas worksheet doesn't show the higher sales figure), the only jackpot value you'll normally see is the advertised estimate. The live PB drawing usually gives you the most recently updated estimate. Maybe MM does the same, but I'm not sure.
"California prizes are hard to figure out. "
They're not that hard to figure out, because the results always show what the base prize is. For the 9/15 drawing it was $82,181 . Nobody won, so it increased due to the sales for 9/17. You won't know exactly how much it will increase but you can make a reasonable estimate. Saturday sales are generally bigger than Wednesday sales, and the jackpot is bigger, so Saturday's 5+0 prize will probably be more than the $89,587 increase for Wednesday. Let's call it 95k. If the $99 million jackpot isn't big enough to buy a ticket the 1 in 11 million chance of winning about 95k is very unlikely to change that.
"I think that is because the 3rd place prize of $50,000 had no winners, so the prize pool for that one was given to the 2nd place prize."
Absolutely not. What would they use to pay the 3rd place winners the next time they get them?
"no one in California should buy Powerball lottery tickets as long as they have that idiotic rule. "
You understand probability well enough that you should see the obvious. The CA prizes have the same odds as other states, so the prizes tend to average out to the same nominal prizes as in other states. On 9/6 the 5+0 prize was about $1.564 million, for each of two winners. On 8/30 4 players each won $1.165 million. On 8/27 the 5+0 prize was $3.2 million, so even if the estimated jackpot of $850 million was a bit below your buy in point the much better odds for 5+0 and the possibility of being the only winner would have made it a good time to get in the game.
"I do not think people usually buy Powerball or Mega Millions tickets based on the size of the second tier prize. "
Certainly not very many, but it makes more sense (or it's less nonsensical) to buy a PB ticket when the jackpot is under $200 million but the 5+0 has built up to 3, 4, or 5 million than to buy one when the jackpot is 500+ but 5+0 is less than 500k.